AUD/USD rallies could struggle near 0.7350 – Westpac

Strategist at Westpac Sean Callow sees bullish attempts in the Aussie dollar to remain somewhat capped  in the mid-0.7300s.

Key Quotes

“May was AUD/USD’s weakest month (-4.9%) since July 2015, with price action likely to be a lot less dramatic this month”.

“A steady hand from the RBA should provide a little support, with a strong export performance encouraging the RBA that it is on the right track”.

“Of course, it won’t want to encourage an unnecessary AUD recovery, so cautionary language on the currency should be included again”.

“Iron ore prices continue to roll over though we note that our broader commodity basket (WCFIAECI on Bloomberg) is still up 13% YTD”.

“Cooling expectations for a June Fed hike should help AUD/USD find buyers into 0.7150, with rallies capped at 0.7350”.

“AUD crosses should mostly struggle, with AUD/NZD at particular risk if the RBNZ holds steady as our NZ team now expects”.